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Music licensing group BMI sues Pandora, deems radio station purchase a 'stunt'

Zachary Lutz
06.14.13
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Music licensors didn't waste any time in characterizing Pandora's acquisition of an FM radio station as an underhanded attempt to cheat performers out of royalties, but the rhetoric has now hit the courtroom, as Broadcast Music Inc. has filed a lawsuit against the streaming service in the New York federal system. Key to the action -- which casts Pandora's move as "an open and brazen effort to artificially drive down its license fees" -- BMI asks for a blanket determination of licensing rates for all music broadcast by Pandora. According to BMI logic, the lower royalty rates that terrestrial providers enjoy shouldn't apply to the online segment of Pandora's business. As the flip side to that argument, however, Pandora argues that it deserves equal footing with online competitors such as Clear Channel's iHeartRadio service, which pays the terrestrial rates. It's a murky decision, for sure. Hopefully the judge has a good supply of Advil.

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